Data Mixed
All of the indexes closed lower Friday with negative internals on the NYSE and NASDAQ as volumes declined on both exchanges from the prior session. The indexes saw some violations of short term uptrend lines on the charts as well as breaks below some 50 DMAs while overall breadth deteriorated. The data continues to send a largely neutral message with some positive signals from the put/call ratios. Yet even with the market weakness on Friday, the overall near term trends continue to be a combination of neutral and positive. As such, we are maintaining our near tern “neutral/positive” outlook for the major equity indexes at this time.
- On the charts, all of the indexes closed lower Friday with negative internals. The SPX (page 2), COMPQX (page 3) and NDX (page 3) all closed below their short term uptrend lines, turning their trends to neutral from positive. Both the MID (page 4) and RTY (page 5) closed below their 50 DMAs while the cumulative advance/decline lines for the All Exchange and NASDAQ turned negative with the NASDAQ’s also closing below its 50 DMA. The NYSE cumulative A/D remains neutral and above its 50 DMA. So we now find only the DJI (page 2) and DJT (page 4) in short term uptrends with the balance neutral. The issues of technical deterioration noted above are troubling. However, the overall trends remain a combination of neutral and positive at this point.
- The data is a mix of neutral and positive signals. All of the McClellan OB/OS Oscillators are neutral with the one exception of the NASDAQ 21 day now in oversold territory (All Exchange:+29.84/-43.0 NYSE:+49.22/-32.3 NASDAQ:+14.55/-55.54). The Equity Put/Call Ratio is a neutral 0.67 while the Total P/C (1.05) and OEX P/C (0.58) are bullish. The OpenInsider Buy/Sell Ratio (45.0) remains in neutral territory. Valuation finds consensus forward 12 month earnings estimates for the SPX of $168.32 leaving the forward 12-month p/e for the SPX at 16.8 versus the “rule of 20” implied fair value of a 17.0 multiple and a 6.0% earnings yield.
- In conclusion, while some technical concerns have appeared on the charts and breadth has started to weaken, the near term trends for the indexes remain a combination of neutral and positive. As such, we are maintaining our near term “neutral/positive outlook for the major equity indexes for the present.
- SPX: 2,790/2,853
- DJI: 25,000/26,000
- NASDAQ: 7,731/7,867
- NDX: 7,284/7,419
- DJT: 10,623/10,940
- MID: 1,968/2,008
- Russell: 1,654/1,712
- VALUA: 6,365/6,487